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Citi Eyes 50,000 Job Cuts
Assets are down 13%, legacy assets are down more than 20% and structural liquidity is up eight percentage points, Citi says.
November 17, 2008
Wall Street may soon find it more difficult to bash Vikram Pandit for being too timid.
Citigroup’s CEO, sometimes maligned for not acting aggressively enough in the face of a brutal business environment, has unveiled plans to slash about 50,000 jobs, dramatically cut costs and continue to reduce assets.
The plan, unveiled in a Town Hall-style meeting Monday morning, was aimed in part at propping up Citi’s struggling stock price, which has fallen sharply in the past year. The early results for Pandit weren’t encouraging, with shares of Citi off another 6% at $8.98, but the stock has since rebounded and is up fractionally at $9.60.
Part of the latest plan is to bring down Citi’s employee count to 300,0000, from the 352,000 it had at the end of the third quarter and the 375,000 it had at its peak in the fourth quarter if 2007. (To see the full slide show presented at the meeting, click here.)
In one of the slides--titled “Getting Fit – Fast!”--Citi notes that its tier 1 capital ratio has improved by 310 basis points from the third quarter of 2007 through the 2008 third quarter, to 10.4% (including the benefits of the TARP program, which added $25 billion to Citi’s capital base). Assets are down 13%, legacy assets are down more than 20% and structural liquidity is up eight percentage points.
Citi said its underlying business remains strong, and it’s in a good competitive position to capitalize on future opportunities.
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